"India's Tax Competitiveness" - International Conference on Taxation Policy for Accelerating Investment : Domestic and Foreign
November 13-14 2002, New Delhi

Vote of Thanks by Shri C N Gangadaran, Chairman, Taxation Committee, FICCI 

Welcome

Tax systems are used by the Governments world wide to achieve a variety of political and policy objectives. A review of tax system across countries shows a remarkable degree of diversity in approaches that have been taken to achieve income distribution and resource mobilization function of tax systems. Tax incentives are inevitable if I may say so, especially when similar relief is offered by neighbouring countries, which is also competing for foreign capital.

President, Shri Lodha has rightly mentioned that at the time when India is looking for increased flow of foreign direct investment in the country, it is important that all impediments, which are coming in the way must be removed.

As all of you are aware that this Conference is being organized with the objective of : (i) Promoting India as a destination for Foreign Direct Investment through dissemination of the message that fiscal laws in India are comparable to those elsewhere and (ii) Apprising international audience / experts of the recent changes in the Indian fiscal regime and to benefit by mutual experiences.

There has been much debate in India about Foreign Direct Investment in recent times. FICCI recently conducted a survey to understand the problems and issues connected with Foreign Direct Investment. Issues such as dissatisfaction amongst investors over non-conducive environment and policy changes having been too slow and inadequate have been dwelt upon. The survey results show that Foreign Direct Investment is an important source of technology; capital investment; management expertise; and creation of industrial activity.

We all know that N K Singh Committee has recently made far reaching recommendations in the area of Foreign Direct Investment.  The Committee has recommended removal of Foreign Direct Investment Caps in several key sectors and a substantial increase in a few others. The recommendations are aimed at enabling an increase in FDI flows to around $8 billion per annum during the Tenth Plan. One of the key recommendation of the Committee is to reduce the corporate tax rates from the existing 35% to 30%. 

President Shri Lodha has also mentioned and I would like to re-emphasise that time is now ripe for the Indian Government to sit with their counterparts and analyse various Clauses of Treaties afresh. We must understand that sea change has taken place since we signed these treaties.

Before I conclude, I would like to that OECD, IBFD and European Commission in joining hands with FICCI in organizing this Conference.